Incredible Ingenuity

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Like many others, I too was amazed at columnist Salil Tripathi’s column. I am not going to argue with him or those like him who think that Rajeev was a novice at age 40 and Modi a pro within four months of taking up a new job. It’s just not worth arguing. What is arguable is the series of claims that Salil Tripathi makes in para 5. Let’s take it one claim at time:

Claim 1: “In the five years between 2004-05 and 2009-10, Gujarat’s per capita income nearly doubled from Rs 32,021 to Rs 63,961. In the same period its neighbour Maharashtra, the perceived languishing laggard, saw its per capita income grow from Rs35,915 to Rs74,027.”

My little calculation based on data available on wikipedia tells me that Gujarat’s GDP grew at an average annual rate of around 4% between 1999 and 2006 while that of Maharshtra grew at 8%. When you put this and Salil’s stats together, Gujarat is the horse you want to bet on.

Claim 2: “Several states besides Gujarat have shown triple digit growth in their gross domestic product (the value of goods and services produced in a year) in recent years, and Maharashtra, Tamil Nadu and Uttar Pradesh have bigger economies. Gujarat now runs a revenue deficit—it spends more than it earns—and its surplus has disappeared. Several other states have improved their fiscal positions meanwhile.”

This is an immensely crafty way of putting it. The first time I read it, it almost made me believe that Maharashtra, Tamil Nadu and Uttar Pradesh have a revenue surplus and that Salil is refering to them when he says “sever states have improved their fiscal positions”. The truth is, as late as 2010, RBI listed Maharashtra as the state with the highest fiscal deficit and like Gujarat, Maharashtra’s revenue surplus has disappeared. Uttar Pradesh fares no better, standing right behind Mahrashtra on fiscal deficit. It was quite brave of Salil to cite these two states to put Gujarat down.

Claim 3:“Reforms? Five states passed the Fiscal Responsibility Act before Gujarat did in 2005, and 20 states preceded Gujarat in implementing value-added tax.” (Emphasis mine)

Here, he makes its seem like a race on who did something first. In any business, doing something first doesn’t really matter in the long run. Ask Nokia and Apple if you don’t believe me.

Claim 4: “Surplus power? Several states, including some in the North-East, have that”

As of 2011, the states with power surplus included Himachal Pradesh (Population 6.8 million), Sikkim (Population 0.6 million), Tripura (Population 3.7 million), Gujarat (Population 60 million), Delhi (Population 16 million) and Dadra and Nagar Haveli (Population 0.3 million). Population of HP, Sikkim, Tripura, Delhi and Dadra & Nagar Haveli put together comes to around 27 million, less than half of Gujarat’s population. Mr. Tripathi knows this and perhaps that is why he did not list these states. I have no choice left but to say that Salil has tried to pull a fast on his readers.